Cash-strapped Territorians top in nation for taking money from superfunds to survive COVID-19

TERRITORIANS are accessing their retirement funds at a proportionately higher rate than anywhere else in the country to tide them over during the pandemic

TERRITORIANS  are accessing their retirement funds at a proportionately higher rate than anywhere else in the country to tide them over during the pandemic.

Economists say this is probably because the NT economy was in tatters to begin with.

At the end of May, there were 26,700 Territorians who had drawn money from their super funds, to the tune of $215 million, according to Australian Taxation Office data.

This means 10.9 per cent of people in the NT had taken advantage of the Federal Government’s super scheme, designed to help people facing financial hardship.

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People could apply to withdraw up to $10,000 this financial year and another $10,000 next financial year from their funds.

Comparatively, 9.4 per cent of Queenslanders and 7 per cent of people in NSW have drawn from their super.

ANZ senior economist Cherelle Murphy said the state of the NT’s economy before COVID-19 was probably related to those super numbers.

“The stronger the economy the less likely people are to withdraw their super and the NT has had a weak economy for some time,” she said.

ANZ senior economist Cherelle Murphy

“Unfortunately the NT economy went in to the pandemic in a less stable position than the rest of the states.”

NT’s economy shrunk by 1.2 per cent in the March quarter, and has shrunk every quarter since September 2017.

Ms Murphy said the rates of JobKeeper and JobSeeker uptake were also skewed toward the NT, which suggests those households were “really struggling” on the income side.

And though the unemployment rate in the NT, now at 6 per cent, had taken the smallest hit compared to the rest of Australia, Ms Murphy said this was probably due to the Territory’s labour market being weak before COVID-19.

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Grattan Institute economist Brendan Coates said overall the NT had been hit less hard than the rest of the country.

He also said that the hit to the retirement funds of people who had drawn on their super was “

overblown”.